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Budget 2015 – Families

Budget 2015 – Families

Families

As previously announced, the government’s new .5 billion childcare reforms are not due to come into force until 2017-18, when the budget deficit is forecast to be substantially reduced. The move is designed to get more families to increase their working hours and is targeted at families earning less than 0,000.

The bulk of the new spending is to be funded by savings from Family Tax Benefit Part B, which still needs to be passed by the Senate, and the scrapping of the Coalition’s proposed paid parental leave scheme.

 

Child Care Subsidy

Proposed date of effect: 1 July 2017

From 1 July 2017, a new Child Care Subsidy will be introduced. This will replace:

  • Child Care Benefit
  • Child Care Rebate, and
  • Jobs, Education and Training Child Care Fee Assistance.

A single means test will apply, subject to an activity test. This subsidised amount is paid directly to the care facility. The level of support will depend on family income as summarised in the following table.

Annual family income[1]Subsidy per childCap
Up to $65,00085% of fee paidn/a
$65,000 – $170,000Will taper gradually from 85% down to 50%n/a
$170,000 – $185,00050% of fee paidn/a
Over $185,00050% of fee paid$10,000 per annum

A new activity test will be established (see table below), with what comprises an activity yet to be announced.

Activity(hours per fortnight)Number of subsidised hours(per fortnight)
8 – 16Up to 36 hours
17 – 48Up to 72 hours
49+Up to 100 hours

Those families earning less than $65,000 per annum who do not meet the activity test will continue to be entitled to up to 24 subsidised hours per fortnight.

Hourly fee caps, indexed to CPI, will apply. Child care payments will be subject to stronger immunisation requirements.

Paid Parental Leave

Proposed date of effect: 1 July 2016

Currently individuals are able to access both Government Paid Parental Leave, as well as any employer provided parental leave entitlements. From 1 July 2016, the Government will remove the ability to claim the full amount of both the Government payment and employer benefits. If the payment from your employer is greater than the Government scheme, which is paid at the minimum wage for 18 weeks, no Government payment will be available. If your employer payment is less, you can receive a Government top up.

Financial support for families with nannies

Proposed date of effect: 1 January 2016

The Government proposed a two year pilot program to subsidise the cost of child care provided in the family home by nannies, which will commence on 1 January 2016. The program will extend financial assistance to participating families who:

  • have difficulty obtaining child care due to irregular working hours (eg shift workers)
  • are in rural or remote areas, or
  • have other accessibility issues.

Support will be subject to a fee cap of $7.00 per child per hour.

Care will be provided for up to 50 hours per week, which is the same as the current child care benefit. Families must meet the program requirements and earn less than $250,000 per annum. The program requirements are yet to be released.

Nannies will need to be attached to an approved service, be 18 years or older, have a current ‘Working with Children’ check and have first aid qualification. There will be no requirement to hold a minimum early childhood qualification.

Family Tax Benefit – Part A

Proposed dates of effect: 1 January 2016 and 1 July 2016

From 1 January 2016, families will only be eligible to receive Family Tax Benefit – Part A (FTB-A) for six weeks in a 12 month period, whilst overseas. Currently for temporary overseas absences, the standard rate is payable for the first six weeks which then reduces to the base rate for a further 50 weeks. The period of time that the standard rate is payable may be extended in special circumstances.

From 1 July 2016, the Government will no longer pay the large family supplement for FTB-A. This supplement is paid for third and subsequent children and is currently $12.32 per fortnight per child.

Disability support and other pensions

The assets test for all pensions will be changed, effective January 2017.

[1] Source: http://www.pm.gov.au/media/2015-05-10/jobs-families-child-care-package-delivers-choice-families

 



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